Chuck Schumer, obviously running point for Senate Democrats on fiscal slope negotiations, claims that a chastened GOP will be willing to deal. But the only party who has made any concessions on a deal has been Chuck Schumer, floating an extension of current tax rates for upper-income earners, accompanying a limit on deductions. He went further this morning:

“The election, what did it say,” he continued. “You elected a Republican House, and what was their watch-word: cut spending. You elected a Democratic Senate and a handsome victory for President Obama. What was our platform? The wealthy should pay a little bit more and there should be new revenues. Just marry the two. The trick will be if Speaker Boehner’s instincts to preserve the Republican Party and preserve the nation in a certain sense, will prevail over the hard right. He needs some help.”

Schumer said in return, Democrats would be willing to negotiate changes on matters close to their party, such as Medicare and Medicaid, and indicated Obama might say as much in an address from the East Room of the White House on Friday.

So Republicans get the same tax rates, and Democrats… no wait, Republicans ALSO get spending cuts (from a discretionary baseline that’s the lowest in 60 years) and unspecified “changes” to Medicare and Medicaid. This is a deal?

Mr. Obama should hang tough, declaring himself willing, if necessary, to hold his ground even at the cost of letting his opponents inflict damage on a still-shaky economy. And this is definitely no time to negotiate a “grand bargain” on the budget that snatches defeat from the jaws of victory [...]

Republicans are trying, for the third time since he took office, to use economic blackmail to achieve a goal they lack the votes to achieve through the normal legislative process. In particular, they want to extend the Bush tax cuts for the wealthy, even though the nation can’t afford to make those tax cuts permanent and the public believes that taxes on the rich should go up — and they’re threatening to block any deal on anything else unless they get their way. So they are, in effect, threatening to tank the economy unless their demands are met.

Mr. Obama essentially surrendered in the face of similar tactics at the end of 2010, extending low taxes on the rich for two more years. He made significant concessions again in 2011, when Republicans threatened to create financial chaos by refusing to raise the debt ceiling. And the current potential crisis is the legacy of those past concessions.

Well, this has to stop — unless we want hostage-taking, the threat of making the nation ungovernable, to become a standard part of our political process.

Just as important to this perspective is the point that Democrats gain far more leverage by letting most, though not all, fiscal slope elements expire. And importantly, it’s not a cliff – the economy can absorb the expiring measures for a few weeks or even a few months. In fact, OMB can structure the sequester cuts so they have no immediate effect, and Treasury, in anticipation of a resolution, can even freeze withholding rates, so the tax changes have no immediate effect. There’s simply no reason to bind to anything in the lame duck session, given the leverage points in the system.

More than that, in economic terms, moving forward on austerity is absolutely insane. The relative lack of austerity and continued budget deficit in the United States, mostly due to gridlock, has kept the economy ahead of competitors. To the extent that there has been softness in the economy, it can be directly attributed to austerity – fiscal policy at the federal, state and local levels have actually dragged on growth since mid-2010, though not as much as it would if we let all these fiscal policies expire.

John Boehner doesn’t want a deal hammered out in the lame duck, but he wants a framework put in place for tax and social insurance program reform, with the only tangible elements to be a “down payment” of $100 billion in spending cuts. In other words, his plan to react to a winning Democratic election is for Republicans to dictate more spending cuts.

If Democrats trod down this path, it’s important to recognize that they do it willingly.

97 Responses
to “Pressure Increases for a Grand Bargain Without Any Policy Rationale”

This had better be Schumer off the reservation. A sell out of this magnitude would top all previous sell outs since 2008. He’s got to be kidding me. Actually, Democrats gained seats in the House and took a decisive majority in the Senate. Who is he fooling with this? Same goes for the WH. Unlike Krugman’s wise advice here, Obama plans to draw his line in the sand on freezing middle income tax breaks. Seriously. That’s what he came away with from the election. Does he realize he can’t run for a third term?

preznit looks set to cave already, but not all the way, according to Zach Goldfarb at WaPo within the past hour.

President Obama is expected to call on lawmakers Friday to pass legislation to immediately freeze tax rates for the middle class and will urge Congress to work together to resolve the year-end “fiscal cliff.”

In a statement scheduled for 1 p.m. in the East Room of the White House, the president will ask Congress to work together to find ways to keep the economy growing and tame the nation’s debt.

Obama is not planning to release a new plan as he gets back to the business of governing after a long and victorious reelection campaign. He is holding back, at least for several days, as lawmakers on Capitol Hill search for a consensus on the best way to avoid the fiscal cliff

If Democrats trod down this path, it’s important to recognize that they do it willingly.

The Grand Bargain is what Democratic policy makers want. They actively seek the “bargain” which is more a governing consensus packaged as bargain so that the Democratic Party can minimize the effect f an angry base.

Dems are caught in the same bind: it’s all or nothing on the tax cuts. They all get extended, or they all expire. They all get extended, Dem voters will be pissed like they were in 2010 ’cause the rich get hearted. They all expire and the economy goes south, the Dems will get fucked in 2014 ’cause the party in power ( = the party in the WH) always gets blamed for the economy.

I think Krugman disagrees on some of the cause-and-effect connections you make, but he certainly does think the combination of both sequester cuts and tax increases for everybody will shrink GDP by a material amount.

[T]he looming combination of tax increases and spending cuts looks easily large enough to push America back into recession.

“If Democrats trod down this path, it’s important to recognize that they do it willingly.”

Yes, it is–just as they willingly smothered the public option in 2009. All this “hang tough, Obama” stuff nauseates me. Even the people who publicly urge him not to buttfuck us again don’t believe it; they’re just going through the motions. There’s absolutely no pressure on the president to do anything right this time around. He had an abysmal track record, and the electorate’s response was to write him a blank check to do whatever the hell he wants for another four years. Brilliant.
If I were the weepy type, I’d weep now.

Expiration of the tax cuts is the only answer with any other position taken a total sell out and the end of any pretense of a democratic party. But if sell out is in the air can’t the progressive wing (ie Sanders) in the senate simply fillibuster it until new Congress is seated.

My own take is Bernie will save the day and embarrass the sell outs into finally doing the right thing. Didn’t polls show that 17% (including me) actually say the best thing is for all the tax cuts to expire and not be re-newed even for middle class?

Reid already saying that with seating of new congress he woulld put in place certain limitations to filibuster but not outright elimination of it for this session which sounds ominous to me. Why not try democracy once boys-it doesn’t bite. Baldwin, Warren and Sanders will not go quietly into the night once seated or reseated so simply shut it down until then. Love the new term of stepping down off the fiscal curb-hope it catches popular appeal. Best thing that could be done is to have capital gains and dividends be treated exactly as regular income and then have not only cap come off FICA but increase FICA taxes to all to fund full retirement at age 62 and MEDICARE for all.

Best move politically would to eliminate fillibuster totally in new senate, have Reid pass with simple majority new tax cuts for lower and middle income, have Obama say he is ready to sign and then let the HOUSE burn to the ground if they don’t fall into line. Obama could then do his FDR immitation and call THE HOUSE REUBLICANS AND BLUE DOG DEMS the do nothing House and start asking to throw the bums out in the new mid-terms to get things done for “the good of the country”. 2014 could be a scene of victory for progressive DEMS if a few of the power brokers ever figured out that it would be good to great for them politically also…

Imagine a Pelosi run House, with a Dem majority Senate run on simple majority with a President no longer worried about re-election and looking for a legacy besides destroying the safety net? It could happen…..

Its what we all should be working for here instead of the current cynical game of editorial one-up-manship that currently manifests here. If you don’t push for change don’t bitch when it doesn’t happen. We have opportunity here if we grab it…

As a people, we have to craft a significant change from doing business in the past. Even bloody revolutions hardly worked. The path for crooks in politics is an especial path, which, if you have the moxie and can eliminate the human part of you, you can also participate.

For starters, we make it a law that any person holding office beyond a specified period of time be banished from the seat of power and all communications therein for maybe 5 years or so.

I believe the Greeks did that.

IOW, we pull their fangs. If that doesn’t work, well there is the equivalent of the gelding knife.

This tilt by the White House to beg Boehner to freeze middle class income tax rates could explain why WaPo shoved its original headline for this article down the Orwellian memory hole. The same story by the same two reporters appears in the print edition this morning (buried on p.A12) with the hed “As Obama meets with top advisers, campaign aides see fiscal policy mandate.” (italics added)

In a truly blatant maneuver, WaPo editors erased the “fiscal policy mandate” from the headline when they posted the story on the Internet. Or should I say, lost the story on the Internet. Akin to their decision to bury the story on the inside pages of the print edition, the “fiscal policy mandate” story is hard to find from WaPo’s home page. The only way to drill down for it is to run a search for “Obama meets with advisers.”

A few more Grayson opinion pieces and appearances on the talk show circuit wouldn’t hurt. Was impressed with the Lawernce O. segment on the fiscal curb last night. Much more of that sooner than later makes the sell out “down the river” harder to push through. Maybe a few meet and announcements from the new progressive wing of Senate could let people know the cavalry is on the way. Right now the filibuster strikes both ways. Bernie, Sherrod etc all know they have a solid chance of being on the right side of history this time around. When it comes to tax cuts maybe we have a bit of reverse tea party time here. This time its the left that says FUCK NO!! Maybe its time to show some balls instead of laying meekly on the table waiting for them to be cut off.

Over at burnt orange it’s exactly the same as before Nov. 7 as well. Damned Republicans want to cut “Entitlements” (remember those are things you ARE entitled to) by 20% so we’ll show them and only cut them by 10%.

“…Maybe it’s time to show some balls instead of laying meekly on the table waiting for them to be cut off…”

Very pithy, but what happened on Tuesday? Wasn’t that the time? Hasn’t that ship well and truly sailed? Here’s part of Jon73′s post at #19, just to refresh your and our memory:

“…There’s ABSOLUTELY NO PRESSURE on the president to do anything right this time around. He had an abysmal track record, and the electorate’s response was to write him a blank check to do whatever the hell he wants for another four years. Brilliant…”

The Republicans are liars and cheats. The concession made two years ago was that the Buah tax cuts for the top two tiers would remain in effect for two more years, not forever. The Republicans are reneging on their end of the deal.

You beat me to it. Yes, this is exactly what the Democrats will do. “Grand bargain. Shared sacrifice,” etc etc ad nauseum.

And after they have screwed at least 90% of us and left the top 10% mostly alone, their apologists will come to FDL, point to some greater evil, and chastise people like me for letting “the perfect be the enemy of the good.”

This seems so easy to fix, but I guess it can’t be, Right?
Lets take a look:
Part One Tax Rates:
1) Republicans say they want to keep the Bush Tax cut rates
2) President Obama says he wants to keep most of the Bush Tax cut rates, but he wants to raise the top bracket.
Solution: Keep all the Bush tax rates as is, and add a new Obama tax rate at the top for people making over $250,000 a year.
Part two Spending cuts:
1) Both sides want to cut about 3 trillion over 10 years.
Solution: just figure out which cuts both side agree on and start there, then the house can pass other cuts they want, and the Senate can pass cuts they want, and then you have a conference hammer out a deal on which cuts can pass both houses.

The unions are on the job. They held dozens of rallies across the country yesterday denouncing any “grand bargain,” including one outside the GOP Senator’s office in Cincinnati, OH. The FDL commenting tools and/or virus screen is not allowing me to include the link to the unions’ article.

Our line should be that the campaign against the plutocrats is not over just because preznit got re-elected.

“”"”Very pithy, but what happened on Tuesday? Wasn’t that the time? Hasn’t that ship well and truly sailed? Here’s part of Jon73′s post at #19, just to refresh your and our memory:

“…There’s ABSOLUTELY NO PRESSURE on the president to do anything right this time around. He had an abysmal track record, and the electorate’s response was to write him a blank check to do whatever the hell he wants for another four years. Brilliant…””"”

Sorry but the Supreme Court nominee potential was too important to let BIG O go down just to make a point.

As far as the pressure perspective comes from there is no blank check just a rudderless PRES who needs to be directed to the course that will make his legacy and actually help the country. Instead of whining, how about we push concepts that apply pressure. We got the executive branch and a more progressive Senate than in ages and an electorate that wants real and substantive change. The HOUSE can be painted for what they are-a bunch of country club old white guys who wouldn’t know what was good for the country if it bit them in the ass. Maybe we point that out when ever possible and if they don’t start towing the line at least a bit then push to out them in the mid terms. Unless you want to start the true VIOLENT revolution its the only course we have. To push the “perfect enemy of the good” concept is not only to be a whiney bitch (no gender intended) but to be a COWARD.

The Republicans are liars and cheats. The concession made two years ago was that the Bush tax cuts for the top two tiers would remain in effect for two more years, not forever. The Republicans are reneging on their end of the deal.

And let’s make it clear, they’ll be doing so with the complicit Democratic Party’s say so. But hey, progressives are gluttons for punishment so we’ll keep on backing them ad nauseaum because doing otherwise isn’t “pragmatic” or “realistic” and is “idiotic.”

Grayson, looking grim for a guy who just won big, was on the Young Turks last night. He said the Grand Sellout is ludicrous and un-necessary. Suicide for the Dems. Any Democrat who votes for this can expect to be Primaried in 2014

This last election was about one thing to me-The Supreme Court and a chance to undo Citizens United. If we have some residual other positve effects (LIKE a takeover of the DEM party by its progressive wing) more power to it.

Yes Jill Stein would have been great but what did she get nationally?? 2%??? Sometimes you have to hold your nose and work on what you can get done. But you can do the work while kicking and screaming the whole while which does have certain healing properties.

To just stand above the fray and comment about the futility of it all is intellectual snobbery at best and cowardness at worst.

We need a million man March on the White House before the Thanksgiving Holiday. Those who can’t make it to DC should camp out in local Senate offices and present Pussy-Dems with golden calf’s like they just did to that Quisling Durbin.

Why should Democratic Senators and House Members sacrifice themselves on the altar when Obama doesn’t have to worry about a re-election

Who says they are sacrificing themselves? Bernie got re-elected with 71% of vote without spending diddley. How? He had faith that the electorate when given the chance can make a good informed choice. Maybe the rest of the democratic party should try it sometime. Sometimes, just sometimes the right choice is also the winning one…

Step 1: Tell your electorate faithful that THIS is the most important election of the cycle and forcing someone to undergo a primary will hurt Democrats in the general.

Step 2: If Step 1 doesn’t work then endorse them as an Independant Party candidate (while chastising anyone not in Democratic Leadership for supporting a third party.) Or simply choose not to fund the candidate that progressives chose (so that next cycle the Leadership/ the plutocrats can hand pick a candidate.)

Cwaltz-clever comments and just as worthless. Yes we are all aware that Dems and repubs are opposite sides of same coin. Now can we move ahead of the not so clever repartee and actually work for change that isn’t just a slogan?

you elected us to focus on your jobs, not ours. I’ve invited leaders of both parties to the WH next week…. Our top priority has to be jobs and growth…. [multiple references to "a plan" which WaPo said this morning he was not going to publish]

I intend to work with both parties to do more, that includes making reforms that bring down the cost of Medicare…. We have to combine spending cuts with revenue, that means asking the wealthiest to pay a little more in taxes.

I’m not wedded to every detail of my plan, I’m open to compromise … but I refuse to accept any approach that isn’t balanced….

On Tuesday night we found out that a majority of Americans agree with my approach …. Our job now is to get a majority in Congress to reflect the will of the American majority …. Right now, if Congress fails to come to an agreement … by the end of the year, everybody’s taxes will automatically go up on January first. Everybody’s …. Nobody … want [sic] taxes to go up … for those making under 250,000 dollars per year…. Let’s extend the middle class tax cuts right now…. That one step would give … 98% of Americans and 97% of small businesses the certainty that they need going into the New Year. It would immediately take a huge chunk of the uncertainty off the table …. [I'm throwing up in my mouth]

Sorry, the die has been cast. You’re going to get 4 more years of slogans. That’s what most of you chose to go with, the party that talks real pretty but when push comes to shove is basically a kinder and gentler GOP.

And yep, I intend to remind the Democratic faithful that THIS is what loyalty to a party gets them.

So he threw it back at congress with some indication that he will take something less than full tax increase on wealthy but he seemed to say not so for those with less than 250k. So we will see. He has got to get the debt limit debate in this as well or that could tank the economy too. so welcome to the day after, pretty much the same as the day before – - divided government.

Extending the “middle class tax cuts” means extending the lower rates set by his December 2010 deal for everyone, including the filthy rich, on income up to $250,000 per couple. (Never stated whether that figure is gross income or adjusted gross income — AGI, or “taxable income,” i.e., after deductions, but I assume it’s AGI.) So all taxpayers would continue to pay the same current rates on AGI up to $250,000 per married couple. Not affected would be AGI above that bracket, for which rates will automatically go up to 39.6% on January first (with increases under preznit’s December 2010 deal and the Medicare Contribution Act on capital gains and other investment income of 5.8%, i.e., from 15% to 23.8%).

Fractal @ 70: that’s kind of how i read it, too. especially interesting that it has “already passed in senate and ready to go as soon as reps do same.” plus, “I’m ready to sign.” looks like he just tossed the ball in boner’s court and walked off.

There is no legal basis to discontinue government operations based on some arbitrary amount of public debt. We print our own gott damm money. We are not Greece. The entire planet wants to lend to us because they want to park their money in the safest asset, U.S. government dollar-denominated securities. Fuck the debt.

you don’t have to convince me of that. And we don’t need a nickel from anyone, so long as we are the sole issuer of the dollar. But, congress can and will mess us up with the law on the debt limit, bc we can’t go over it. There are two ways around it which has been written about here by letsgetitdonw done several times. So far Obama has shown no interest in either one.

It would be magical thinking to believe that AFTER winning reelection Obama would think that his deficit obsession was misguided. The caving/’compromising’ part is just stylistic; the substantive belief and goal is unchanged. Part of me just wants to flip off the old computer rather than torturing myself with what I already guessed would be the case.

Obama’s been “validated”. Why would he change? He and his fellow 1 percenters.

I googled the generally accepted list of potential Obama nominees and came up with this from cnn: (I am link impaired, but on this site only, for some reason.) I will not represent that I did extensive research because I am not writing a book, and Obama might have a different list he’s working off of (notwithstanding that he loves to try his cases in the press before making decisions).

The only one who should be on the list is Judge Diane Wood, but I’m sure she’d make Mitch McConnell scream in rage. She wouldn’t be a good compromise candidate. There’d be no Kumbaya across the aisle. She’s been considered twice, but, alas, fallen short. With the actual makeup of the court at last at issue for reals, she wouldn’t get it. Too risky.

Check out 9th circuit Judge Paul Watford, of which CNN writes, “Supporters call him an ideological moderate, which may not sit well with progressives seeking a stronger left-leaning voice.” Swell.

Or the DC Circuit’s Merrick Garland, who apparently has already been in the final competition for the Sotomayor and Kagan seats: “A possible compromise choice, considered a relative judicial moderate on the high-profile appeals court…His perceived “moderate” views may not sit well with some liberals.” Did I mention he’s already been seriously considered TWICE????

Judge Mary Murguia (9th circuit) is a good bet as she has left so faint a paper trail she barely has a Wikipedia page and might not have a heck of a lot of missteps in her past. Jacqueline Hong-Ngoc Nguyen (9th Circuit) appears to have left a slightly wider footprint not because of an especially distinguished career before going on the bench but because of her highly unusual personal background as a Vietnamese refugee.

Kamala Harris is there for ideological eye candy, Lisa Madigan has argued exactly once in front of the Court, Kathryn Ruemmler is a White House crony who CNN actually almost compares to Harriet Meiers. Harris and Madigan also caved on the reprehensible mortgage settlement.

8 choices, one possible good one. I cannot even trust Barack Obama to make a good choice when it is the only one he has. I’m not rolling the dice on a one in eight chance.